A basket of European bourses had wrapped up the week in an upbeat texture despite mixed signals from the US Fed that had rattled global equity markets, boosted up by the gains in financials and materials sectors, while the scandal-hit Credit Suisse climbed 1.9 per cent following media headline that the Swiss lender had been mulling a potential merger with UBS.
Aside from that, the benchmark pan-European STOXX 600 added 0.1 per cent and closed out the session with a weekly percentage gain of 1 per cent following sharp sideway movements on concerns of higher inflation that could prompt the Central Banks to raise interest rate.
Nonetheless, benchmark STOXX 600 soured sharply last week and fell from a record high following an unprecedentedly hawkish tone from the US Fed, however, unlike the US Federal Reserve, the European Central Bank had reiterated that it had been too soon to taper off fiscal supports, eventually helping rebalance the European bourses.
More importantly, inflation fears were eased further on Friday after a US Commerce Department report had unveiled that the US Fed’s preferred inflation indicator, the core PCE (Personal Consumption Expenditure) prices, rose less than anticipated, while a stagnation in US Consumer Spending last month had led to analysts’ belief that a recent uptick in inflation, which happens to be closely related to a supply restrain alongside a shortage of available labours, might be ‘transitory’ as cited by the US Fed Chair Jerome Powell alongside US Treasury’s Yellen.
European shares edge up, hovers below record closing highs
Citing statistics, on Friday’s European market wind-down, London’s blue-chip index FTSE 100 added 0.37 per cent to 7,136.07 and French CAC 40 shed 0.12 per cent to 6,622.87, while Frankfurt’s DAX added 0.12 per cent to 15,607.97.
Elsewhere in the Europe, Italy’s FTSE MIB rose 0.35 per cent to 25,510.50, while Madrid’s benchmark IBEX 35 gained 0.23 per cent to 9,095.00. On the week, FTSE 100 soared 1.69 per cent and French CAC 40 climbed 1.50 per cent, while Frankfurt’s DAX jumped 1.41 per cent.
Besides, Italy’s FTSE MIB surged 1.39 per cent and Madrid’s IBEX had reported a weekly gain of 1.41 per cent. Meanwhile, addressing to investors’ optimism over a solid economic growth, a Chief market analyst at IG, Chris Beauchamp said, “What has been remarkable is how indices globally have shrugged off the Fed's apparent change of outlook (which has been careful walked back to an extent this week), and have resumed the march higher, presumably following the dangling carrot of economic growth as the world returns to normal. ”